HEMANT M NABAR Vs. FAROHAR AND CO

JUDGEMENT

(1.) This is a reference to the larger Bench made by D. K. Deshmukh, J. , in a Notice of Motion taken out for setting aside the insolvency notice. The question is whether an insolvency notice under section 9 of the Presidency towns Insolvency Act, 1909, hereinafter called as the 'act' can be set aside on the ground that the decree was not enforceable for want of leave of the court under Order 21, Rule 22 of the Code of Civil Procedure (C. P. C. ). The learned Single Judge has referred this question in view of the conflicting judgments by the Single Benches of this Court.

(2.) In (M/s. Bhurmal Kapurchand and Co. v. M/s. Premium Machine Tools and Co. ) , A. I. R. 1977 Bom. 305, Mridul, J. , held that the issuance of insolvency notice is equitable mode of execution of a decree or order. In the absence of leave under Order 21, Rule 22 of the C. P. C. , it is not open to the judgment creditor to execute the decree which is more than 2 years old. If the execution of the said decree is not permissible under the provisions of the C. P. C. then it must also be held that the judgment creditor is not entitled to resort to any equitable mode of execution thereof.

(3.) As against this in (Sharad R. Khanna and others v. Industrial Credit and investment Corporation of India Ltd. and others) , 1993 (1) Bom. C. R. 546, dhanuka, J. , held that the insolvency notice now as a result of 1978 Amendment, can be set aside only on the grounds which are mentioned in subsection (5) of section 9 and that the grounds mentioned in Rules 52 (B) and 52 (C) of the Bombay Presidency Town Insolvency Rules, 1910, hereinafter called as "rules", have lost their legal efficacy. Same view has been taken by Rebello, J. , in (Bijausingh Mansingh Baid and others v. Mansingh H. Baid) , 2000 (2) Bom. C. R. 580 : 2000 (2) All. M. R. 668 wherein it was held that in view of the amendment in 1973, the judgment in M/s. Bhurmal kapurchand's case is no longer good law. Similar view has also been taken by another learned Single Judge J. A. Patil, J. , in judgment and order dated 8-2-2001 in Notice of Motion No. 104 of 2000 in Insolvency Notice No. N/ 72 of 2000 (T. R. Rajasekhar and others v. The Bharat Co. op Bank Ltd. and others) , and connected matters. Deshmukh, J. , has, however, taken a view that Article 372 of the Constitution of India had not been taken into consideration by the earlier Benches of this Court. Article 372 is considered would result in pre-constitutional laws being saved. Once those laws were saved then Rules framed by this Court before the amendment of 1978 would also be the law in force and consequently grounds other than those contained in section 9 (5) would be available under the Rules framed by this Court.